From Red Notice to Magnitsky Law

 

Credit: en.wikipedia.org

Nguyen Van Than

30/01/2020

Red notice is a book by Bill Browder who successfully lobbied for the Magnitsky Act in the US, Canada and Europe. Browder was born in 1964 in the US. His grandfather, Earl Browder was a union leader in Kansas. Earl was invited to Moscow in 1926 and trained to become a Communist leader. He married a Russian woman and had 3 sons. The eldest was Felix. Earl brought his family back to the US and settled in New York in 1932. He represented the United States Communist Party and ran for presidents in 1936 and 1940. He did not win but gained 80,000 votes. This was enough to make President Roosevelt anxious. In 1941, Earl was arrested and sentenced to 4 years imprisonment for passport offences. However, he was released just after one year as the US and Soviet union were becoming allies going into World War II.

After the war ended, Earl was constantly harassed thanks to Senator McCarthy’s Communist witch hunt program. His wife decided to teach their children to avoid politics. To her, the most meaningful cause in life was to become academics particularly in science or mathematics. Felix followed her advice and completed his bachelor degree and at the tender age of 18. He got his PhD in mathematics at Princeton University at 20.

Although Felix was one of the best young mathematicians, he was still a son of a ‘red’ leader. When World War II broke out, Felix wanted to pursue his academic studies but Princeton refused to give them a deferment letter. After the war, he applied for a position at a small university called Brandeis. The Board was pleasantly surprised that the Princeton graduated mathematician would want to join them. But they were hesitant upon knowing that he was the son of a Communist leader. Fortunately, the chair of the Board at a time was Eleanor Roosevelt who was of the view that the school should not deny a brilliant mathematician just because he was a son of a Communist leader that her husband had previously imprisoned. Felix rose to become an outstanding academic. In 1989, he was awarded the National Medal for Mathematics by President Clinton.

Bill Browder’s mother, Eva had a similarly interesting background. She was born in a Jewish single mother’s family in Vienna in 1929. As the Nazis were coming, her mother Erna decided to give her up for adoption in the US. At the age of nine, Eva took the train to Europe on her own and boarded a steamship to the US to meet up with her adopted parents. But 3 years later, Erna managed to get out of Austria and turned up in the US to take back her daughter. They moved into a small flat and Erna had to sew for 80 hours a week to survive. Though living in poverty, Eva was an outstanding student and got a MIT scholarship. There she met Felix and they got married in 1948. Bill Browder was born in 1964 as the youngest child in a left leaning academic family. Bill’s older brother Thomas followed in his parents footstep and enrolled in PhD at 19. Whereas Bill was just an average student. When Bill was 12, his parents decided to send him to a boarding school in Colorado. He was not interested in study but spending his time smoking and drinking. It was not a surprise that he was expelled from the school. His parents sent him to a number of psychologists to see what was wrong with him. Eventually, Bill decided that the best form of revenge was to become a capitalist in a Communist-sympathiser family.

But no reputable universities wanted to take him. Only University of Colorado which was ranked first by Playboy accepted his application. He was still more interested in girls and parties. Only when a close friend was arrested for bank robbery as a result of drugs addiction that Bill became serious. Two years later, he was accepted by University of Chicago. He enrolled in MBA at the famous Stanford University in 1989. A year later, he took a job with the Boston consulting group and moved to London to chase his dreams of becoming a capitalist in the Communist Eastern Europe.

After the few short stints working for Robert Maxwell and Salomon Brothers, Bill decided to set up his own investment funds to operate in Russia. The privatisation program by the Russian government meant that shares in state-owned enterprises were sold dirt cheap producing tens of millionaires overnight. With a humble initial capital of US$25 million, Bill’s Hermitage Investment Funds grew exponentially to become the biggest foreign investment fund in Russia worth $4.5 billion. But he had to pay an enormous price for this success. He had to fight off the Russian oligarchs and crooks using all kinds of tricks to still company’s assets that he invested in. The Russian oligarchs all have their own security force. The assassination of successful businessmen was a common phenomenon in Russia.

Initially, Bill were supported by Vladimir Putin as Putin wanted to send a strong message to the oligarchs that he was in control. But things changed when Putin decided to arrest the oil billionaire Mikhail Khordorkovsky who was one of the richest men in Russia at the time worth about US$15 billion. According to Bill, all of the Russian billionaires one by one was so scared that they all agreed to do a deal to share 50% of their wealth with Putin. Bill estimated that Putin became the biggest Russian oligarch with assets over US$200 billion meaning that he is the richest man in the world.

In November 2005, Bill Browder was expelled from Russia for ‘security reasons’. He quietly sold all his shares and withdrew all moneys in his Hermitage Investment Funds out of Russia leaving only a small office with a few employees. But the Russian internal security personnel raided his office and took away all documents including the common seal of the company. Not long after, Bill’s employees informed him that his company owed creditors $230 million. This was exactly the same amount that Hermitage had paid to the Russian tax office for capital gains.

Bill engaged Sergei Magnitsky to look into the matter. Magnitsky was a 35 year old lawyer specialising in taxation. After a period of investigation, Magnitsky discovered that the security personnel who raided the office had fraudulently used the common seal of the company to claim a tax refund of $230 million. The corrupt official in the tax office colluded and paid out the claim. Magnitsky wrote a petition to the Interior Ministry informing them of the scam to steal $230 million from the government funds by corrupt officials. Unfortunately, the petition was handled by the very corrupt officials who were involved in the scheme. As a result, Magnitsky was arrested and imprisoned for lodging a false claim. He was tortured to death because he refused to withdraw the petition.

Bill Browder investigated and knew the same corrupt officials who tortured Magnitsky had been buying up luxurious properties and went on location throughout Europe and the Middle East. Bill complained to the UK Foreign Office but there was nothing they could do because the incident took place in Russia. Bill tried to lobby with the US Department of Foreign Affairs but the Obama government was trying to reset relations with Russia at the time. The break came when Bill was introduced to Senators Ben Cardin (Democrat) and John McCain (Republican) who agreed to sponsor Magnitsky legislation to deny visas to corrupt officials and to freeze their assets within the US’s jurisdiction. Initially, Senator John Kerry Chairman of the powerful Foreign Relations Committee did not want to support the Magnitsky laws as he was aiming to replace Hillary Clinton as Secretary of Foreign Affairs. Fortunately and as a coincidence, Russia was joining the WTO after 20 years of negotiation. For US companies to get into the Russes market, Congress had to repeal the Jackson Vanik Act. The price was Magnitsky legislation. On 14 December 2012, President Obama signed legisaltions to repeal Jackson Vanik and simultaneously introduced Magnitsky Act.

On 19 December 2012, Putin introduced laws to stop American parents from adopting Russian orphans to retaliate against Magnitsky Act. In 2017, Bill Browder was tried and sentenced to 9 years imprisonment in absentia. The Russian police issued a red notice to Interpol meaning Bill Browder could be arrested anywhere by any police. Putin wanted to turn Browder into an international fugitive. However, Interpol revoked the red notice on the basis that it politically motivated. In the joint press conference at Helsinki in July 2018, Putin declared to the world that he was willing to hand over 12 officials to FBI for investigation into election interference if the US was willing to hand over Bill Browder to Russia.

The Magnitsky Act began with a list of 18 corrupt officials who were directly involved in violation of Sergei Magnitsky’s humans rights. In 2016, President Obama extended the Act and signed into law Global Magnitsky Act with universal application and not just limited to Russia. The list of corrupt officials is compiled by the US Department of Foreign Affairs. As at December 2019, it is estimated that about 200 individuals and organisations all over the world are mentioned in the list.

In October 2017, the Canadian government introduced the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) initially with a list of 52 individuals. In December 2019, the EU agreed to proceed drafting Magnitsky laws. Bill Browder’s unwavering has brought justice not just to Sergeithey Magnitsky but also hope to all victims of human rights violations from all over the world.

Australia is probably the last frontier. Over the last two years, a number of individuals and organisations including the Vietnamese Community in Australia, VOICE, Human Rights Relief Foundation, Vietnamese Australian Lawyers Association, Multicultural Communities Council of NSW and Democratic Youth Australia chaired by Janice Le a solicitor of the Supreme Court of New South Wales have been quietly working to lobby for the introduction of Magnitsky Act in Australia. In December 2019, Marise Payne the Minister for Foreign Affairs announced that Australian Parliament would consider introducing Magnitsky legislation and called for submissions by 31 January 2020. Janice has drafted a submission on behalf of the group. The next step is to lobby and attend parliamentary hearings conducted by the joint Committee on Foreign Affairs, Human rights and Trade.

There is still a lot of work to be done to get the Magnitsky Act introduced in Australia and continuing efforts by all civil society organisations will be required. Hopefully, the Australian Parliament will soon pronounce the Magnitsky Act so that we can all assist the Australian Department of Foreign Affairs to compile a list of corrupt officials. The first names to be on the list could be Vietnam’s Minister of Police and those military officials who were involved in the raid and murder of Mr Le Dinh Kinh causing enormous pain and anger to all Vietnamese from all of the world.